Are you planning to establish a company in the Netherlands and act as a director? In this short guide, we discuss how you can work as a remote director for a company in the Netherlands.
As a non-EU national, you rarely need a residency or work permit. However, if you intend to work and live in the Netherlands, there are several legal issues to consider.
Taxation of directors in the Netherlands
A Dutch company employee would typically be subject to local taxation in their place of employment. On the other hand, if you live in the Netherlands, you must declare your foreign income on your tax return. Your overall international revenue is comprised of both Dutch and non-Dutch sources. You are not always compelled to pay income tax in the Netherlands, even if you declare this income there. According to the Tax Treaties, your salary will most likely be taxed in the country where you work.
According to the Tax Treaty, management fees or the director’s salary must be taxed in the country in which they are paid, for example, the Netherlands, even if the director does not reside in the Netherlands.
The standard pay scale (2022: € 48,000) is in effect for a director-major shareholder (DGA) residing in the Netherlands. This rule also applies to DGAs who live outside of the country but have a major stake in the country. Most tax treaties state that a DGA’s compensation (earned while serving as a director for his Dutch BV while living abroad) is subject to Dutch tax. According to a Dutch Supreme Court ruling, the standard pay scale for DGAs (DGA-salary) who live abroad is not applicable.
How to obtain residency as a Director
For employees, including directors of a Dutch firm, obtaining residency in the Netherlands is relatively simple. If the director also owns at least a 25 per cent stake in the company, he will be considered an ‘entrepreneur’ for residency purposes.
As a sole proprietor running a small business, you have only two viable options for obtaining residency:
- Startup Visa (which is basically a short-cut to the Entrepreneurs Visa, for innovative companies)
- Entrepreneurs Visa (which requires a solid business plan, healthy profit expectations and at least 2-3 created jobs within 18 months)
The entrepreneur can be on the payroll of Bolder Launch (acting as the Recognised Sponsor).
Directors who hold less than 25 per cent of the relevant corporation for which they operate have a simpler route to the Netherlands. Particularly if the Director has been employed by the “head office” for at least three months and the Dutch firm has been established as a subsidiary of the said head office. If the director earns the minimum income stipulated by the IND (3.549 EUR in 2022, approximately 30 years), this organisational structure will permit the application for an Intra-Company Transfer residency permit.